Taiwan is a major R&D center in Asia and plays a key role in the global supply chain. When considering an investment in the jurisdiction, intellectual property is a crucial intangible asset for which advanced planning is required.

Jane wang
Partner
Email: [email protected]

The main laws in the field of intellectual property include Patent Law, Trademark Law, Copyright Law, and Trade Secret Law, among others. Patent and trademark registration applications must be filed and approved, while copyright and trade secret protection does not require registration. For patents and trademarks, Taiwan adopts the “first to file” registration system. The right is usually granted to the first to file for a particular patent and / or trademark if all relevant legal requirements are met.

Three types of patents are available: invention, utility model and design patents. A patent is granted to a technical creation which presents novelty, non-obviousness and utility. Patents for inventions are protected for 20 years from the date of filing the patent application. An extension of the patent term is allowed for a pharmaceutical or agrochemical or manufacturing process, taking into account the timeframe for obtaining the required regulatory approvals. A utility model is a creation made with respect for the form, construction or arrangement of an object and is protected for 10 years from the date of filing. A design patent is a creation made with respect to the shape, pattern, color or combination thereof of an article as a whole or in part by visual appeal and is protected for 15 years from of the filing date.

Four types of marks are available: marks, certification marks, collective membership marks and collective marks. A trademark is a type of identification used on or with products and / or services to indicate the source or origin of the products or services and may consist of a word, sign, symbol, color, three-dimensional shape, movement, hologram, sounds, or a combination thereof. Geographical indications can be registered as certification marks, allowing products or services to be associated with the reputation of their origin in terms of quality or other characteristics. Collective member marks are intended for associations, companies or groups to identify members and members who supply the products
or services.

Copyright protection is available for spoken and literary works, musical, dramatic and choreographic works, artistic, photographic, pictorial and graphic works, as well as audiovisual works and sound recordings, architectural works and programs. computer science. The economic rights to copyright are protected during the creation of the work and last up to 50 years after the creator’s death. The economic copyright of a commercial entity lasts 50 years from public release or from the time of creation if the work has never been released publicly.

Trade secret protection is available for any method, technique, process, formula, program, design or other information that may be used during production, sales or operations. It may also apply in cases where the secret is not known to persons generally aware of the same type of information, and if it has real or potential economic value due to its secret nature, and if its owner has taken reasonable steps to keep it a secret.

Brian Hsieh, Partner, Email-brian.hsieh@taiwanlaw.com
Brian Hsieh
Partner
Email: [email protected]

IP for foreign companies

Taiwan’s intellectual property regime is open to foreign nationals on a reciprocal basis. Patents and trademarks require approval and registration from the Taiwan Intellectual Property Office. Foreign nationals can apply for protection (registration) if their home country also makes patent and trademark protection available to Taiwanese citizens.

Under Patent Law and Trademark Law, as long as a foreign company can properly establish that it owns a Taiwanese patent or trademark registration, it does not need to be recognized by the Taiwanese government. Recognition exists when a foreign company has a presence in Taiwan registered in the island company register. Trademark infringements will result in criminal liability, allowing a foreign company holding a Taiwanese trademark to initiate criminal proceedings against those who use it without permission. The Patent Law only provides for civil liability in the event of infringement.

Copyright and trade secrets do not require government approval or registration to gain legal protection. Foreign nationals can obtain protection for their works or secrets in the same way as a Taiwanese citizen.

In addition, a foreign company can initiate civil or criminal proceedings against those who infringe its copyright or trade secrets, seeking the same remedies as a Taiwanese.

According to the authors’ observation, the Taiwan Intellectual Property Court, the judicial body that deals exclusively with intellectual property matters, does not treat foreign companies as parties to civil proceedings any differently from the way it does. deals with local parties. The only exception is when a foreign national who has no residence or business office in Taiwan initiates a civil action, in which case the plaintiff may be required, upon petition filed by the defendant, to post a bond in the amount of at least equal to legal costs for the second and third instances.

When the defendant makes such a petition, asking the court to require the foreign plaintiff to post a bond, the defendant may refuse to continue the dispute before the court decides on the petition or the foreign plaintiff complies with the decision. court in this regard.

Under the Taiwanese Civil Procedure Code, a foreign claimant may be exempted from the obligation to post the bond if he can establish that he has assets in Taiwan worth more than the amount of the bond for costs of justice. The court has discretion to decide whether the value of the foreign plaintiff’s assets exceeds the amount of the bond for legal costs otherwise required.

Monica Wang, Partner, Courriel-monica.wang@taiwanlaw.com
Monique wang
Partner
Email: [email protected]

Intellectual property financing

To follow the government’s “Intellectual Property Value Promotion Project” announced in May 2019, the Investment Bank of Taiwan issued the Regulations Governing Mezzanine Financing Generating Income from Intangible Assets to Provide Financing to Small and medium-sized businesses and start-ups. in collaboration with the Industrial Technology Research Institute (ITRI) and the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (SMEG Fund).

Mezzanine financing refers to a type of financing between lower risk debt financing and higher risk equity investment. In this model, when certain conditions are met, the lending bank has the right to convert the rights of its creditors into equity in the borrowing company. In practice, when a bank lends money to a company, it not only receives interest, but also becomes entitled to convert the rights of its creditors into equity in the company according to an agreed swap ratio in the event of a loss. failure or after the expiration of a certain period. This debt-to-equity conversion mechanism allows lenders to speed up the application process with relatively simplified due diligence formalities, while the business can obtain financing with relatively less collateral.

At present, IP financing in Taiwan is a collective work and a coordinated effort between Taiwan Business Bank, SMEG Fund and ITRI. As a first step, a company must obtain a recommendation from ITRI and seek collateral from the SMEG Fund before applying for a loan from Taiwan Business Bank. Once the SMEG Fund Guarantee Letter is obtained, providing the borrowing company with at least 80% to 90% of the guaranteed coverage, the credit facilitation process begins and the Taiwan Business Bank will review the property appraisal report. intellectual property issued by qualified appraisal staff, then decide whether or not to approve the loan and, if so, determine the amount. The borrowing company can claim at least 80% of the value of the patented technology determined and as indicated in the IP valuation report. The maximum loan available for a single business is NTD 30 million (USD 1 million).

Once the loan is approved, the business can use the financing to purchase the intellectual property rights owned or recommended by ITRI. Alternatively, the business can use the financing to support its business operations. The term of the loan is between five and seven years, depending on the use of the funds. In addition, the loan not only allows the lender to earn interest of 2-3% per annum, but the loan is also tied to the net profit of the borrowing company. In other words, the lending bank is entitled to 0.3% of the net tax profit made by the borrowing company each year during the term of the loan. To date, many biotechnology companies, medical device companies and technology companies have successfully obtained bank financing through this method of IP financing.


Jane Wang is a partner at Formosa Transnational. You can contact her at [email protected]

Brian Hsieh is a partner at Formosa Transnational. You can contact him at [email protected]

Monica Wang is a partner at Formosa Transnational. You can contact her at [email protected]

Transnational Formosa

Transnational Formosa

13 / F, 136 route Jen Ai,

Second. 3, Taipei

Contact details:

Phone. : +886 2 2755 7366

Email: [email protected]

www.taiwanlaw.com

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